Lincoln on Acquisition Spree - Analyst Blog
August 03 2011 - 7:30AM
Zacks
Lincoln Electric Holdings
Inc. (LECO) recently announced the acquisition of the
welding operations of Maryland based Techalloy Company Inc. and of
its parent company, Central Wire Industries Ltd. The company is a
producer of nickel alloy and stainless steel welding consumables,
which are positioned well globally in the high growth energy and
infrastructure business segments. These segments are expected to
continue to grow as well as expand and improve Lincoln’s
relationship with its customers.
According to Lincoln, the
acquisition of Techalloy expands the product portfolio of high
alloy consumables required to service customers across the globe.
The terms of the deal were not disclosed. Techalloy employs 55
people and generates annual revenue of approximately $70
million.
In another deal, Lincoln acquired
all of the assets of Nevada based, Applied Robotics, Inc., a
leading manufacturer of CNC cutting tables and accessories in North
America. The company is known by its brand name Torchmate
in the welding industry. Torchmate offers a wide variety of CNC
plasma and oxyfuel cutting tables and systems to small and medium-
sized fabricators.
According to Lincoln, metal cutting
is closely related to arc welding, the addition of which will not
only complement its existing business line but also add to the
company’s ability to provide better solutions for its global
customers.
Lincoln Electric is pursuing a
multi-year strategy to become more cost competitive by building
manufacturing facilities in Eastern Europe and Asia. Prior to this,
the company entered the Russian market with the acquisition of
Mezhgosmetiz-Mtsensk OAO and OOO Severstal-metiz. In addition to
the above acquisitions, the company also partnered with IPG
Photonics Corporation to explore global opportunities in the
high-power laser welding and cutting market.
Lincoln Electric recently reported
its fiscal second quarter results of an adjusted EPS of 68
cents, up from 38 cents in the year-earlier quarter and ahead of
the Zacks Consensus Estimate of 55 cents. Total revenue, as
reported by the company, increased 35.6% year over year to $699.3
million. The company’s continued focus on new products accounted
for an increase in sales and market share gains. We currently have
a Zacks #1 Rank (short-tem Strong Buy rating) on the stock.
Cleveland, Ohio-based Lincoln
Electric designs, develops and manufactures arc welding products,
robotic arc-welding systems, plasma and oxyfuel cutting equipment
and commands a leading position in the brazing and soldering alloys
market. Lincoln Electric competes with Illinois Tool Works
Inc. (ITW), Charter International Plc and ESAB Group
Holdings Ltd.
ILL TOOL WORKS (ITW): Free Stock Analysis Report
LINCOLN ELECTRC (LECO): Free Stock Analysis Report
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